China's economy rebounded sharply in the second quarter, up 3.2% from a year earlier, stronger than expected. Economists say the recovery is likely to continue in the coming quarters as policies are expected to remain supportive and flexible.
With China's economy recovering from a sharp contraction of 6.8% in the first quarter, the country has become the first major economy in the world to recover strongly from the damage caused by the covid-19 influenza pandemic.
Major economic indicators continued to improve. Data released by the National Bureau of statistics on Thursday showed that China's industrial production was recovering rapidly, with a year-on-year growth of 4.4% in the second quarter, in sharp contrast to the 8.4% decline in the first quarter.
The service sector grew by 1.9% in the second quarter, reversing the decline of 5.2% in the first three months. According to the National Bureau of statistics, investment and consumption are rebounding as the decline in fixed asset investment narrowed to 3.1% in the first half of the year and the retail sales contraction rate in the second quarter narrowed to 3.9% from 19% in the previous quarter.
Liu Aihua, spokesman of the National Bureau of statistics, said at a news conference held in Beijing: "generally speaking, in the first half of the year, China's economy has gradually overcome the adverse effects of the covid-19 influenza pandemic, showing a momentum of recovery growth, which has increased momentum and vitality.".
Economists said the strong rebound in China's economy is due to the following factors: China has taken effective measures to control the epidemic, has given strong policy support to the resumption of business and investment, and China's rapid recovery in production has led to a better than expected recovery in exports.
Lu Ting, chief China economist at Nomura Securities, said: "although the global epidemic continues to deteriorate, China's economy has successfully achieved a rapid recovery, and the growth rate of gross domestic product (GDP) has risen to more than 2%, which is a remarkable achievement.".
Lu Kang said that China's rapid resumption of production will help national exports recover and stabilize employment. In addition, timely and effective policies to stimulate infrastructure investment will also help to stimulate domestic demand.
Economists at Goldman Sachs said in a research report that China's economic performance in the second quarter was much higher than expected due to the virus's much smaller drag on the economy and the strong supportive policy stance of the Chinese government.
Economists said that as China's economic recovery shows some signs of imbalance, supply recovery is faster than demand, and investment rebound appears to be stronger than consumption, more policies are expected to stimulate consumption and domestic demand.
Despite the recent steady economic recovery, the country's retail growth is still in negative growth, with a year-on-year decline of 1.8% in June as the covid-19 influenza pandemic continues to restrain consumption in the catering industry and other industries requiring physical contact.